You say larger companies survive crashes, but their valuations still take huge hits. Look at the last dot-com crash: MSFT crashed from $59 to $21, AAPL crashed from $4.90 to $1.00, CSCO crashed from $79 to $14, and so on. 1 of these companies (AAPL) took 5 years to recover and double its market cap peak of 2000, while the 2 other companies never even recovered their market cap peak. So betting on Sam's metric in 1998-1999 would have been a very reliable indicator of whether or not a bubble would follow these years.
>>> Of course, there could be a macro collapse in 2018 or 2019, which wouldn’t have time to recover by 2020. I think that’s the most likely way for me to lose.
Macro collapse = Bubble Bursting. The performance of YC's personal portfolio is irrelevant to the idea of bubble bursting if there are other investors running a pump and dump on the industry at large.
I took "macro collapse" to mean some tumultuous event independent of existing market valuations, such as
natural (or man-made) disasters, epidemics, war, etc.
I've never heard the term myself, so I am speculating.
What then would you propose as a decision procedure for whether we are in a bubble?
Bubble bursts are generally large-scale psychological phenomena. Nothing can be done to avoid them, and boom bust cycles will continue in small sectors, larger sectors, and the entire economy for the foreseeable future. As investors slowly start struggling to find valuable places to put their money, an idea that it isn't worth while begins to circulate through the investment world.
The best advice is to always invest wisely. It makes no difference whether you are in a bubble or a contraction. Doing so will put you in a better position to succeed even when the bubble bursts.
Boom/bust cycles can be thought of as a redistribution of bad investments, which often time results in the demise of fresh competitors or, at best, the assimilation of "failed" capital (human, tech, infrastructure) of those ventures into the companies which successfully navigate the transition at a very low cost.
The bubble that different parties speak about when talking about the tech world has to do not so much with the amount of money flowing into that sector as an aggregate, but the near-exponential growth in new companies and the unfathomable valuations of some of them which are hard to justify.